Growth in its licensed business with Target Corp. wasn’t sufficient to offset steep declines in its relationship with Tesco in Europe, cutting Cherokee Inc.’s third-quarter profits by more than half.
Henry Stupp, chief executive officer of the Van Nuys, Calif.-based brand management company, said U.S. retail sales and royalty revenues from the Cherokee brand’s business with Target were each up 15.4 percent. “Internationally, our retail sales and royalty revenues were down 47.6 percent and 43.2 percent, respectively, over the prior year’s quarter, almost entirely due to a decline in the sales of Cherokee products at Tesco,” he noted. “Conversely, overall sales and royalty revenues for our other international retailer partners were up almost 2 percent.”
In the three months ended Oct. 29, net income fell 54 percent to $1 million, or 12 cents a diluted share, from $2.3 million, or 26 cents, in the 2010 period. Overall royalties slipped 21.8 percent to $6 million from $7.7 million in the year-ago quarter.
“We continue to diligently work with Tesco to develop a framework for success going forward, as well as introducing the Cherokee brand into new markets to offset any revenue erosion as we work on a correction with our Tesco business,” the ceo noted. “Specifically, we look forward to launching in both Japan later this month and the Russian Federation in the coming months, and we continue to pursue new opportunities for all our brands, both owned and represented.”
Tesco has the license for the Cherokee brand in the U.K., Ireland and certain central European markets.
During the quarter, Cherokee hired two former Target executives, Sally Mueller and Jamie Curtis, as chief brand officer and vice president of marketing, respectively.
For the nine months, Cherokee’s net income fell 22.2 percent to $6 million, or 70 cents a diluted share, while royalty revenues were down 16.3 percent to $19.6 million.
In yet another fashion show shuffle, @elleryland is moving its show in sync with the Paris couture calendar — though the brand is still keeping one foot on the city’s ready-to-wear schedule. Their runway show in January will coincide with the launch of a new strategy: designing two main collections each year instead of four, which will then be released in four drops. “As we all know, the system needs to change. We need to show sooner to give time back to artisans and designers to do what they do best — create,” said founder Kym Ellery. #wwdnews #wwdfashion (📷: @kukukuba)
@maxmara’s classic 101801 coat was the cornerstone of its pre-fall 2018 collection. The design team expanded the traditional double-breasted, kimono-sleeved style into a trapeze coat, lean belted styles and a peacoat and presented them in monochromatic looks – like the camel one pictured here. #wwdfashion #prefall18 (📷: George Chinsee)
The @cfda has shifted the dates of #NYFW, with Men’s showing on February 5 through February 7, and Women’s will directly follow, running from February 8 through 14. The preliminary schedule will be released on the CFDA’s web site in the next few days, but Mark Beckham, VP of marketing for the CFDA, revealed that @rafsimons will be back to close the men’s-specific part of the week with a show on February 7 #wwdfashion (📷: Kelly Taub)
@ferragamo is introducing a new space dedicated to the development of women’s and men’s leather good samples. The laboratory, which is created eco-friendly materials and designed to reduce the environmental impact of the manufacturing processes, will allow the company to expand its accessories offering through traditional artisanal approaches. #wwdfashion (📷: @aitorrosasphoto)
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“There is no formula. There is no guideline. I can watch Ted Talks all day, but there is no one who can advise me on exactly what it is I should be doing,” said @ronniefieg, CEO of @kith, in an interview with WWD’s @ariahughes at the brand’s new SoHo office in Manhattan. Head to WWD.com to see how Fieg went from hanging out in shoe stockrooms at 13 to building his own business. #wwdfashion (📷: @weston.wells)
@fearofgod and @maxfieldla have teamed up on a pop-up installation. The store, located in the gallery space across from Maxfield’s Melrose Ave location, is the site of the brand’s House of God pop-up in which Fear of God founder @jerrylorenzo has created a church-inspired installation. A dozen vintage church pews sit in front of an LED screen playing 90s gospel singers in an effort to re-create an environment akin to a Southern Baptist Church, Lorenzo explained. Read more about the pop-up on WWD.com #wwdfashion (📷: Jennifer Johnson)
Known for his sleek, sophisticated American glamour, Norman Norell is the subject of an upcoming exhibition at @fitnyc. “Norell: Dean of American Fashion,” which runs from February 9 through April 14, will feature approximately 100 ensembles and accessories. His best work is exemplified by the designer’s glittering “mermaid” gowns frosted with thousands of hand-sewn sequins – like the one pictured. (📷: William Helburn) #wwdfashion
For pre-fall 2018, @balmain didn’t let go of the glitz. A crystal embroidered baseball jacket priced at around $40,000 hangs in the “couture” section of the brand’s first men’s pre-collection. Sporting the words “Balmain Army” across the back, the item took around two months to make. “When it was completed, it was like Christmas, it was like, ‘It’s done, it’s exactly what I wanted,’” said Balmain’s creative director @olivier_rousteing during a tour of the collection in a Paris showroom on Monday. #wwdfashion